Significant Reduction in Petroleum / Gasoline Prices, HOW?

What can you do to make these oil prices reasonable?

  • Take economic action?

    Votes: 12 28.6%

  • Take political action?

    Votes: 3 7.1%

  • Do both?

    Votes: 10 23.8%

  • Do nothing?

    Votes: 17 40.5%
  • Total voters
    42
  • Poll closed .
The following article brings up few interesting point to consider.

1. "Are We 'Running Out'? I Thought There Was 40 Years of the Stuff Left"

2. "Big deal. If gas prices get high, I’ll just drive less. Why should I give a damn?"

3. "Is the Modern Banking System Entirely Dependent on Cheap Oil?"

4. "How is the Oil Industry Reacting to This?"

5. "How Can I Be Sure This Isn't Just More 1970s Doom-and-Gloom?"

more views and points http://www.lifeaftertheoilcrash.net/

The general consensus among now disinterested scientists is that oil production will peak by 2010 at the latest.
 
sharkbites, thx for the article, I read it completely, but remain unconvinced, as it simply contradicts all "official" data from OPEC, Saudi Arabia, US government, oil companies, reputable people like Daniel Yiergin etc

I agree that we'll run out of oil sometime over the next 20-50yr, but of the oil type WHICH COSTS $1.5/barrel to produce.

As I quoted in previous messages, OPEC is consistently saying SINCE 2000, that the runup is due to "paper barrels" and the physical market is "well supplied". At that time they still wanted to maintain a price of $25-28, nowadays they got "spoiled" and seek a band $50-60.

For several years now, it seems as if spot and futures oil markets exist in two parallel universes, with no connection between the two.

E.g. OPEC would offer 2Mbpd extra capacity (noting it's a symbolic move, because they always said that "the physical market is very well supplied"). Yet OPEC will say after a month that noone actually took the offer and meanwhile oil spiked +20%.

A few days ago:

05-28-06 05:05 PM EST

CARACAS -(Dow Jones)- OPEC's acting secretary general, Mohammed Barkindo, said Sunday that the global oil market is well supplied.

"This market is very well supplied both in terms of crude and products," Barkindo said upon arriving in Venezuela for an OPEC ministerial meeting. Ministers of the Organization of Petroleum Exporting Countries will hold a formal meeting in Caracas on Thursday.

"You have to look elsewhere (than market fundamentals) at what is driving the prices," he said.
More...
 
Quote from moo:

YOU can. Get rid of that SUV and other energy-wasting ways of life.

A lot of whining, blaming, and scapegoating going on here. Instead, how about a look at the mirror? The "culprit" can very often be found right there staring at you.

Last time I heard, those trucks that nobody really needs are still selling well in the US. Obviously, gas prices are not high enough yet, not even close. Guess it's time to buy some (futures).
More...

Absolutely right!

No arguement here, however, tell that to the municipalities already commited in their vehicle leases and purchases and fuel consumption, tasked with being first responders, as well as to all the other parts of the infrastructure.

You see, most people believe the false misdirection in suggesting that the vast majority of the usage in the US is voluntary and consumer based.

We discussed that here, and gave a non-scientific deliniation of fuel usage (7 categories listed), 1 category of which are general purpose consumers, such as SUV drivers.

So, your statement instead of being 100% or even a generous 50% applicable is really only 1/7 or 14% applicable.

So, imagine (and feel free to take the time to justify your statements by deliniating 7 or 12 or other categories of US Consumer usage of gasoline products, just like I did, and apply it to the discussion)

so imagine, your improvement of removing ALL suv's and gas guzzlers. Then that would effectively only apply to (using the non-scientific scenario) 14% of the marketplace .

Please aim significantly higher and then your suggestions will carry a much more better (:d) weight.

((I think that respectfully treats your comments and participation with the size and weight of the problem. So, no, this thread is not some, how did you say? whinning and scapegoating)))
 
Would you have bought a Hybrid instead of an SUV if the tax laws were reversed?
My neighbor 3 houses down the street answered yes. He bought an H2 last year. The govt is using our tax $$$ to subsidized SUV purchases why shouldn’t you buy a gas guzzler?
The tax break for an SUV is $100,000, while less than 4.000 for a Hybrid.
http://www.elitetrader.com/vb/showthread.php?threadid=66634&perpage=6&pagenumber=2
Keep in mind the SUV’s. and pick ups are the highest profit margin products for the auto industry.

Again it boils down to who makes the decisions… who benefits?...

This recent event is interesting,
Government blocks wind farm plans
The list of halted wind power projects includes one near Bloomington, Ill., scheduled to begin this summer and start operations next year. That wind farm would be the nation's largest source of wind energy, generating enough power for 120,000 Chicago-area homes.
The U.S. government has ordered work stopped on more than a dozen wind farms, saying the giant turbines might interfere with military radar.
http://www.physorg.com/news68373280.html

Isn't it interesting with today’s technology (actually it’s old) they claim radar electronics cannot filter out stationary ground known signature echo’s within our homeland, and it’s posing a problem?...
 
I don't know about government blocking alternative energy resources.

But I am pretty certain that the oil price is at these highs because of inability to arbitrage between physical market and futures whereas the oil price is determined relative to futures (e.g. Brent minus $2):

1/ A very well supplied PHYSICAL market, a GLUT. Commercial (oil co) and government stockpiles at ALL TIME HIGHS. Not just now, but for quite some time.

2/ All extra "demand" / "shortages" etc is for PAPER BARRELS, in the futures exchanges of NYMEX and IPE.

There are over 160 different types of oil and the WTI and Brent represent a very small amount in the total world production, which prevents arbitrage between physical and futures markets.

This has been going on for years.

It's definately NOT OPEC or the oil producers to blame here. Oil exchanges are controlled by USA and UK.

But who can be big enough to run such a con job in the oil market and get away with it for so long?

Let's "follow the money" ...

Theory1
The most simplistic scenario would be that the Bush-istas are giving the oil co buddies decades worth of profits in a few short years. Can it be that simple?

Theory2
Petrodollar (from Arab countries in defacto dollar block) recycling in US debt markets to support bonds? I.e. Arab oil producers collect people's savings from all over the world and deposit them in US bonds.

I can think of several more.
 
guys, I have to commend all the commentators and participants, even the newer ones (ones with fewer than 100 entries to their names, although those counts are dynamic reflecting ones current count, and this changes with time)...

this thread is being watched, read and observed both for its (as I have been told) excellent thesis, commentary and objective nature....

by so many decision makers and influencers that it transcends the trading community and in the overlap between the economic and political arenas, even in that community...

this matter is larger than what the inteligencia or shapers of public news consumption have manipulated into thinking as a small issue or a pain at the pump issue, or a consumer purchasing issue...

I have clearly widened the conversation to include the most essential elements that are almost always ignored and taken for grant it, namely the damage being done to the infrastructure of the municipal sector of all cities and state goverenments across this great nation....

this includes school districts and the taxation that they contribute toward against homeowners in their regions....

the "pass along" has a negative magnifier effect that even the Federal Reserve is picking up in their measurements of inflation and interest rates,

hence the constant multiple -100 point drops in the Dow Jones and -22 point drops in the S&P500 index(s) daily if not weekly since May 2006.....

we're experiencing that (overly simplistic) collapse scenario that was outlined earlier in this thread......
 
Greenspan´s recent commentary regarding the recommendation for the US to move towards cellulosic ethanol is a correct view and is helpful to alleviate the problem of accentuating a failed alternative strategy...namely using food grains as substrates...This has been well known for over 20 years...

What he did not mention was oil from algae for biodiesel...and contracting sugar cane producers from all over the world ...and the removal of US legal hindrances allowing for cheaper importing...

His mention of hybrids was on the mark....and yes hybrids have to deliver increased electric powered ranges that satisfy commuters...otherwise they are no better than basic small diesels...and yes diesel...not gasoline hybrids should be considered..

What was more interesting was the commentary suggesting that it indeed is paper and not actual demand that has been causal in creating a higher than normal oil price...

The reason that paper has formed the higher prices is because of speculative reasoning hardened by Bush Administration policies...

For Goldman Sachs...this is just a standard game...Their job is to locate and thus control doable assets...and do them...and because of the fact that they are not alone...only causes further exuberance...

What was not appreciated in the commentary was the justification for Bush policies in that the high prices force alternatives...although true as well...

It is quite clear that because of Bush policies then ...that oil is priced $20 to $25 per barrel high than the norm...

Paulson has positioned Goldman Sachs in a more advantageous position than ever before...and remember that it was his firm who threw out the first $100 plus numbers for oil....and Paulson is the largest shareholder of Goldman...

If the US wants to create a better energy future...then the message is clear...
 
Quote from matija:

i really think we could cut oil demand by just driving more fuel officiant cars, so no more SUVs
More...

You can cut oil demand as much as you want (in fact it's already flat/down as previously stated), but as long as price is determined the way it currently is, it might have little or no impact on prices.

Right now, the way markets work, it's like pricing oil off something completely independant, like e.g. GOOG stock price.

If I have enough money, there's nothing to prevent me from driving GOOG stock to absurd price levels.

There might be a GLUT of physical "wet barrels", but if the system says that oil is priced off GOOG price, it means it'll cost $400/barrel.

The difference, is that for physical oil, you get almost price-insensitive buying by people who need it, to sell your "inventory".

Don't the people in charge know this absurd situation exists? Ofcourse they do! Even OPEC (who is a main beneficiary) has been openly saying it since 2000 (see my prior posts).

So why do they let the game continue? Your guess is as good as mine...
 
Quote from mtzianos:

I don't know about government blocking alternative energy resources.

But I am pretty certain that the oil price is at these highs because of inability to arbitrage between physical market and futures whereas the oil price is determined relative to futures (e.g. Brent minus $2):

1/ A very well supplied PHYSICAL market, a GLUT. Commercial (oil co) and government stockpiles at ALL TIME HIGHS. Not just now, but for quite some time.

2/ All extra "demand" / "shortages" etc is for PAPER BARRELS, in the futures exchanges of NYMEX and IPE.

There are over 160 different types of oil and the WTI and Brent represent a very small amount in the total world production, which prevents arbitrage between physical and futures markets.

This has been going on for years.

It's definately NOT OPEC or the oil producers to blame here. Oil exchanges are controlled by USA and UK.

But who can be big enough to run such a con job in the oil market and get away with it for so long?

Let's "follow the money" ...

Theory1
The most simplistic scenario would be that the Bush-istas are giving the oil co buddies decades worth of profits in a few short years. Can it be that simple?

Theory2
Petrodollar (from Arab countries in defacto dollar block) recycling in US debt markets to support bonds? I.e. Arab oil producers collect people's savings from all over the world and deposit them in US bonds.

I can think of several more.
More...

I don't know what the ultimate answer will be. On the theories, many times the simple and common sense assessment of a situation, is usually the right one.
I've stopped paying too much attention to what they say, rather I place more weight in what they do, and what the facts are. Talk is cheap, $$$ in the bank is what seem to count..The clear path is to understand who makes what decisions and who benefits... it's the old proven simple scenario of cause and effect imho...
 
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